5 Tips For Going From 2 Incomes To 1
How To Manage Going From Two Incomes To One
There are many life changes that can cause a family to review its income management approach. The change from two incomes to one, whether through the impending birth of a child, or as a result of redundancy, can have a major impact on security and lifestyle. But, with a good plan in place and a positive approach to making it work, it may not be as difficult as you imagine.
1. Acknowledge The Savings You Will Make
It may not be your first thought, however, when one partner no longer commutes to work, there are actually savings to be made. You may see a reduction in travel expenses, daycare fees, lunches, coffee and clothing bills. These are genuine bonuses that are worth keeping in mind before you panic.
2. Document Current Expenses & Start Cutting
Start taking a hard look at your current expenses before your income change happens. Note everything down, from the big bills to the little extras. Look through your bills from the past year to help create a budget. They are the best indication of likely expenses. It’s then time to roll up your sleeves and make some cuts. Consider shopping around for options on insurance or phone contracts. Use your utilities wisely with shorter showers and less strain on heaters and air conditioners. Work out a family budget for meals – and stick to it!
3. Give It A Trial Run Before The Change Kicks In
If you have time up your sleeve in advance of the changes, do all you can to clear debts, get ahead on home loan repayments and start to put money aside for an emergency fund. Even better still, give it a go and start living on the one income for a month or two. Be strict with yourselves. By making the change earlier than you need to, you’ll be doing yourself a favour by amassing extra savings too and helping yourselves get ahead. Don’t wait for the day to arrive before you cut back!
4. Temporary Or Potentially A Long Term Impact
Determine whether the impact is likely to be temporary or long term. This will determine the level of changes you need to make and also determine how flexible you can be.
5. Find Ways To Supplement Your Income
Depending on your availability there may be opportunities for you to actually supplement your income. Try online auction sites, for example, where you can sell items you no longer need. Any little bit of money can help with weekly shopping, birthday presents or be kept aside for emergencies. The old adage is true – every little bit counts.
Living on one income after you have accustomed yourself to two will take a lot of determination. There will be times where you will feel frustrated and overwhelmed, but with a plan in place and the willingness to make tough decisions, you can do it!
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